Ohio Attorney General Dave Yost has given conditional approval for venture capital firm General Catalyst to acquire Akron, Ohio-based Summa Health.
In November, Summa reached a $485 million definitive agreement to join General Catalyst subsidiary Health Assurance Transformation Corp. Under the terms, the $485 million purchase amount will help Summa Health transition into a for-profit structure and pay off $850 million in debt. Remaining cash will fund a new, separately governed community foundation to support community investment in the Akron area.
Mr. Yost said in a June 18 news release that Summa and HATCo must meet 10 conditions, including the transfer of an additional $15 million in cash and another $15 million in equity to the surviving nonprofit foundation to “benefit the people of Summit and surrounding counties who are served by the system.”
“My role in this process is to protect Ohio’s charities,” he said in the release. “After a comprehensive review by the charitable law section of my office, we’re confident that the agreement includes enforceable commitments that will secure Summa’s nonprofit mission, protect patient care and ensure continued investment in the greater Akron community.”
Other conditions include:
- The charitable purpose of the foundation will be amended to a purpose consistent with Summa’s original charitable purpose.
- A majority of the foundation’s board members will have no affiliation with Summa Health.
- For three years after closing, the foundation will agree not to sell its $15 million equity interest.
- Foundation board members will complete the attorney general’s charity board education program within three months of the transaction.
- For 10 years, the attorney general will retain the jurisdiction to enforce HATCo’s ongoing obligations to the system.
- HATCo will agree to cooperate with any future attorney general investigation.
- For 10 years after the sale’s closing, HATCo will provide the attorney general a copy of the annual report reflecting its compliance with its post-closing obligations.
- For 10 years after the closing of the deal, HATCo will notify the attorney general of certain transactions that could trigger antitrust concerns.
With the approval, Summa and HATCo must provide notice and conduct a public hearing within 45 days to receive comments on the proposed use of the proceeds.
